Northamptonshire County Council has been given the freedom to increase council tax by 2% more than other local authorities without holding a referendum, it was announced today.

In the final local government finance settlement, James Brokenshire said the troubled county would be given the extra council tax flexibility to help improve its governance and services.

He also said he would not be removing the current referendum limits for council tax, which will remain at up to 3% for other local authorities.

He said: ‘During the consultation, many local authorities called for referendum limits to be removed. However, I believe the proposed limits allow local authorities to retain the flexibility to raise additional resources locally to address local needs, whilst protecting households from excessive increases in council tax, in line with the government’s manifesto pledge.’

In today’s settlement, Mr Brokenshire also confirmed the Government will invest £18m to keep the payments threshold for New Homes Bonus at 0.4%.

The social care funding – announced at the Autumn Budget – will be distributed according to the existing Adult Social Care Relative Needs Formula, he also confirmed today.

However, the Local Government Association (LGA) warned councils still face a £3bn funding gap this year.

Lord Porter, chairman of the LGA, said: ‘The money councils have to provide local services is running out fast and there is huge uncertainty about how they will pay for them into the next decade and beyond.

‘The upcoming Spending Review is absolutely crucial for councils.’